Opti­mis­ing sup­ply ves­sel costs — and reduc­ing fuel con­sump­tion by up to 28%

BACKGROUND

Oil and gas sup­ply ves­sels are ships that are spe­cial­ly designed to sup­ply off­shore oil and gas plat­forms. The pri­ma­ry func­tion for most of these ves­sels is logis­tic sup­port and trans­porta­tion of goods, tools, equip­ment, and per­son­nel to and from off­shore oil plat­forms and oth­er off­shore structures. 

Our client is one of the world’s largest inte­grat­ed oil and gas com­pa­nies, hav­ing oper­a­tions at all stages of the hydro­car­bon val­ue chain. Its marine divi­sion deploys some 2300 ves­sels in sup­port of its drilling and pro­duc­tion oper­a­tions. The cost in terms of fuel to run these ves­sels is enor­mous — approx­i­mate­ly US$60 mil­lion annu­al­ly at today’s fuel prices.

We had already worked with the client before this on anoth­er project. Giv­en our suc­cess in that engage­ment, we were brought in to analyse the clien­t’s fleet man­age­ment prac­tices to under­stand if addi­tion­al costs could be saved through oper­a­tional efficiencies.

ANALYSIS

Our analy­sis iden­ti­fied sev­er­al areas where ves­sel util­i­sa­tion could be improved, and costs opti­mised. In particular:

1. Ves­sel util­i­sa­tion was very poor, with sig­nif­i­cant peri­ods on stand­by and sig­nif­i­cant unladen trav­el­ling time.
2. There was a high per­cent­age of time where track­ing sys­tems were switched off, lead­ing to lack of route and per­for­mance transparency.
3. There was no rou­tine report­ing of trips out­side of the planned sched­ule and ves­sel requests were often made at short notice, lead­ing to unsta­ble ves­sel scheduling.
4. The over­all ves­sel man­age­ment con­trol sys­tem (MCS) was inef­fi­cient, with fre­quent non-adherence to stan­dard process­es, lack of data dri­ven KPIs, and poor for­ward plan­ning that result­ed in last-minute changes.

Fol­low­ing the results of our analy­sis, we were asked to help the client imple­ment improve­ments to the ves­sel MCS in order to reduce ves­sel costs whilst still sup­port­ing the trans­porta­tion needs of the busi­ness unit.

PROJECT APPROACH

We aimed to deliv­er sig­nif­i­cant mea­sur­able ben­e­fits with­in a 22-week peri­od. For the ben­e­fits to be sus­tain­able, the approach focused on defin­ing, devel­op­ing, and imple­ment­ing changes to the ves­sel man­age­ment con­trol sys­tem (MCS) while pro­vid­ing train­ing and coach­ing in key super­vi­so­ry skills.

A steer­ing com­mit­tee was set up com­pris­ing senior man­age­ment from the clien­t’s region­al oper­a­tions. Their role was to mon­i­tor progress, pro­vide vis­i­ble sup­port for the pro­gramme, and address any bar­ri­ers to progress. Addi­tion­al­ly, a Man­age­ment Action Team (MAT) was set up con­sist­ing of indi­vid­u­als from the logis­tics depart­ment with the author­i­ty to imple­ment changes to systems.

The core project team con­sist­ed of our con­sul­tants and full-time staff from the clien­t’s side. The intent was to trans­fer skills in change man­age­ment tech­niques from our side to their side, ensur­ing that the client would have the skillsets and capa­bil­i­ties need­ed to con­tin­ue the improve­ment effort once our involve­ment had concluded.

PROJECT IMPLEMENTATION

Some of the key activ­i­ties over the 22-week peri­od included:

1. Intro­duc­ing the project team to LEAN prin­ci­ples and pro­vid­ing coach­ing to help team mem­bers iden­ti­fy improve­ments in a struc­tured manner.
2. Devel­op­ing sched­ul­ing options for land­ing craft trans­port (LCT) and tugboats.
3. Imple­ment­ing KPIs and visu­al man­age­ment tech­niques. Man­age­ment and report­ing mech­a­nisms were defined such that progress against tar­get­ed improve­ments could be monitored.
4. Cross-functional 5‑why problem-solving ses­sions to iden­ti­fy improve­ment actions and improve cross-functional collaboration.
5. Stan­dard­ised work pro­ce­dures for mon­i­tor­ing load­ing, unload­ing, and ves­sel move­ments. Process­es for load­ing, unload­ing, and back load­ing were also stream­lined to reduce bot­tle­necks and waste.
6. Roles and respon­si­bil­i­ties for Logis­tics & Marine per­son­nel and Ves­sel Sched­ulers were redefined.

RESULTS’